PYXUS INTERNATIONAL, INC.

Previous wording

Readers are cautioned that the statements contained in this report regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements, which are based on current expectations of future events, may be identified by the use of words such as "guidance", "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets," and other words of similar meaning. These statements also may be identified by the fact that they do not relate strictly to historical or current facts. If underlying assumptions prove inaccurate, or if known or unknown risks or uncertainties materialize, actual results could vary materially from those anticipated, estimated, or projected. These risks and uncertainties include those discussed in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended March 31, 2025 and in our other filings with the Securities and Exchange Commission. These risks and uncertainties include: our reliance on a small number of significant customers; continued vertical integration by our customers; global shifts in sourcing customer requirements, the imposition of tariffs and other changes in international trade policies; shifts in the global supply and demand position for tobacco products; variation in our financial results due to growing conditions, customer indications and other factors; loss of confidence in us by our customers, farmers and other suppliers; migration of suppliers who have historically grown tobacco and from whom we have purchased tobacco toward growing other crops; risks related to our advancement of inputs to tobacco suppliers to be settled upon the suppliers delivering us unprocessed tobacco at the end of the growing season; risks that the tobacco we purchase directly from suppliers will not meet our customers’ quality and quantity requirements; weather and other environmental conditions that can affect the quantity and marketability of our inventory; international business risks, including unsettled political conditions, uncertainty in the enforcement of legal obligations, including the collection of accounts receivable, fraud risks, expropriation, import and export restrictions, exchange controls, inflationary economies, currency risks and risks related to the restrictions on repatriation of earnings or proceeds from liquidated assets of foreign subsidiaries; many of our operations are located in jurisdictions that pose a high risk of potential violations of the Foreign Corrupt Practices Act; risks and uncertainties related to geopolitical conflicts, including the conflicts in the Middle East and disruptions affecting shipping in that area; impacts of international sanctions on our ability to sell or source tobacco in certain regions; exposure to for…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Readers are cautioned that the statements contained in this report regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements, which are based on current expectations of future events, may be identified by the use of words such as "guidance", "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets," and other words of similar meaning. These statements also may be identified by the fact that they do not relate strictly to historical or current facts. If underlying assumptions prove inaccurate, or if known or unknown risks or uncertainties materialize, actual results could vary materially from those anticipated, estimated, or projected. These risks and uncertainties include those discussed in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended March 31, 2025, and in our other filings with the U.S. Securities and Exchange Commission. These risks and uncertainties include: our reliance on a small number of significant customers; continued vertical integration by our customers; global shifts in sourcing customer requirements, the imposition of tariffs and other changes in international trade policies; shifts in the global supply and demand position for tobacco products; variation in our financial results due to growing conditions, customer indications and other factors; loss of confidence in us by our customers, farmers and other suppliers; migration of suppliers who have historically grown tobacco and from whom we have purchased tobacco toward growing other crops; risks related to our advancement of inputs to tobacco suppliers to be settled upon the suppliers delivering us unprocessed tobacco at the end of the growing season; risks that the tobacco we purchase directly from suppliers will not meet our customers’ quality and quantity requirements; weather and other environmental conditions that can affect the quantity and marketability of our inventory; international business risks, including unsettled political conditions, uncertainty in the enforcement of legal obligations, including the collection of accounts receivable, fraud risks, expropriation, import and export restrictions, exchange controls, inflationary economies, currency risks and risks related to the restrictions on repatriation of earnings or proceeds from liquidated assets of foreign subsidiaries; many of our operations are located in jurisdictions that pose a high risk of potential violations of the Foreign Corrupt Practices Act; risks and uncertainties related to geopolitical conflicts, including the conflicts in the Middle East and disruptions affecting shipping in that area; impacts of international sanctions on our ability to sell or source tobacco in certain regions; exposure …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Sales and other operating revenues decreased $126.1 million, or 19.9%, to $508.8 million for the three months ended June 30, 2025 from $634.9 million for the three months ended June 30, 2024. This decline was a result of a 30.1% decrease in kilo volumes sold primarily from Africa and North America due to the timing of certain customer shipments. In the fourth quarter of fiscal year 2025, certain customer orders were accelerated from Africa and North America, which resulted in the year-over-year sales decline that was partially offset by higher average sales prices.

Current wording

Sales and other operating revenues decreased $122.2 million, or 10.2%, to $1,079.0 million for the six months ended September 30, 2025 from $1,201.2 million for the six months ended September 30, 2024, due largely to the 12.9% decline in kilo volumes sold as a result of the timing of certain customer shipments. In the fourth quarter of fiscal year 2025, certain customer orders were accelerated from Africa and North America, which contributed to the decline in sales and other operating revenues for the current year-to-date period.

Previous wording

Cost of goods and services sold decreased $107.8 million, or 19.6%, to $443.2 million for the three months ended June 30, 2025 from $551.0 million for the three months ended June 30, 2024. This decrease was mainly due to the reduction in sales and other operating revenues.

Current wording

Cost of goods and services sold decreased $116.3 million, or 11.2%, to $925.6 million for the six months ended September 30, 2025 from $1,041.9 million for the six months ended September 30, 2024. This decrease was mainly due to the reduction in sales and other operating revenues.

Previous wording

Our primary sources of liquidity are cash generated from operations, short-term borrowings under our foreign seasonal lines of credit, availability under our ABL Credit Facility, and cash collections from our securitized receivables. Our liquidity requirements are affected by various factors from our core tobacco leaf business, including crop seasonality, foreign currency and interest rates, green tobacco prices, customer mix, crop size, and quality. Our leaf tobacco business is seasonal, and purchasing, processing, and selling activities have several associated peaks where cash on-hand and outstanding indebtedness may vary significantly compared to year end. The first three quarters of our fiscal year generally represent the peak of our working capital requirements.

Current wording

Our primary sources of liquidity are cash generated from operations, short-term borrowings under our foreign seasonal lines of credit, availability under our ABL Credit Facility, and cash collections from our securitized receivables. Our liquidity requirements are affected by various factors from our tobacco leaf business, including crop seasonality, foreign currency and interest rates, green tobacco prices, customer mix, crop size, and quality. Our leaf tobacco business is seasonal, and purchasing, processing, and selling activities have several associated peaks where cash on-hand and outstanding indebtedness may vary significantly compared to year end. The first two quarters of our fiscal year generally represent the peak of our working capital requirements.

Previous wording

The total borrowing capacity of our foreign seasonal lines of credit increased $209.6 million when compared to the prior year and were primarily utilized to purchase larger volumes of green tobacco. The amounts presented as the remaining amount available for borrowing under the foreign seasonal lines of credit are subject to limitations based on the level of receivables and inventories as collateral and by certain restrictive covenants.

Current wording

The total borrowing capacity of our foreign seasonal lines of credit increased $182.2 million when compared to the prior year and were primarily utilized to purchase larger volumes of green tobacco. The amounts presented as the remaining amount available for borrowing under the foreign seasonal lines of credit are subject to limitations based on the level of receivables and inventories as collateral and by certain restrictive covenants.

Previous wording

Net debt increased as of June 30, 2025 when compared to June 30, 2024 due to higher borrowings on our foreign seasonal lines of credit, partially offset by lower borrowings on the ABL Credit Facility and the repurchase of certain long-term debt in August 2024.

Current wording

Net debt increased as of September 30, 2025 when compared to September 30, 2024 due to higher borrowings on our foreign seasonal lines of credit, partially offset by lower borrowings on the ABL Credit Facility.

Previous wording

Working capital declined from June 30, 2024 to June 30, 2025 by $66.2 million, or 15.0%, driven by higher borrowings on our foreign seasonal lines of credit to fund the purchases of larger volumes of green tobacco, particularly in Africa and South America.

Current wording

Working capital declined from September 30, 2024 to September 30, 2025 by $16.0 million, or 4.1%. Lower working capital was a result of the increase in borrowings on our foreign seasonal lines of credit used to fund the purchases of larger volumes of green tobacco, particularly in Africa and South America, partially offset by decreases in cash and receivables as a result of timing that softened the impact of the growth in inventory.

Previous wording

Total processed tobacco decreased from June 30, 2024 to June 30, 2025 by $29.6 million, or 4.9%, primarily from lower inventory costs of the current crop that has been processed in South America. Uncommitted levels of processed tobacco remain low due to strong demand from our customers. While undersupply conditions have persisted in the global tobacco market in recent periods, the larger crops experienced in Africa and South America are anticipated to provide a more balanced position. See "Note 7. Inventories, Net" to the "Notes to Condensed Consolidated Financial Statements" for additional information.

Current wording

Total processed tobacco decreased from September 30, 2024 to September 30, 2025 by $39.6 million, or 5.3%. This decrease is primarily driven by timing of shipments made in the current quarter from certain African origins. Uncommitted levels of processed tobacco remain low due to steady demand from our customers. While undersupply conditions have persisted in the global tobacco market in recent periods, more favorable weather conditions have resulted in larger crops harvested, particularly in Africa and South America, which is anticipated to provide a more balanced position through the remainder of the fiscal year. See "Note 7. Inventories, Net" to the "Notes to Condensed Consolidated Financial Statements" for additional information.

Previous wording

As of June 30, 2025, our cash, cash equivalents, and restricted cash was $101.4 million, of which approximately $79.1 million was held in non-U.S. jurisdictions for non-U.S. working capital needs, a majority of which is subject to exchange controls and a portion of which is subject to tax consequences upon repatriation, which could limit our ability to fully repatriate these funds. Fluctuation of the U.S. dollar versus many of the currencies in which we have costs may have an impact on our working capital requirements. We will continue to monitor and hedge foreign currency costs, as needed.

Current wording

As of September 30, 2025, our cash, cash equivalents, and restricted cash was $106.4 million, of which approximately $80.5 million was held in non-U.S. jurisdictions for non-U.S. working capital needs, a majority of which is subject to exchange controls and a portion of which is subject to tax consequences upon repatriation, which could limit our ability to fully repatriate these funds. Fluctuation of the U.S. dollar versus many of the currencies in which we have costs may have an impact on our working capital requirements. We will continue to monitor and hedge foreign currency costs, as needed.

Previous wording

The change in cash, cash equivalents, and restricted cash for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 increased by $26.5 million. This increase was driven by higher net proceeds received from foreign seasonal lines of credit, partially offset by an increase in cash used in operations to fund purchases of larger crops.

Current wording

The change in cash, cash equivalents, and restricted cash for the six months ended September 30, 2025 compared to the six months ended September 30, 2024 decreased by $10.2 million. This decrease was driven by the cash used in operations to fund purchases of larger crops, partially offset by higher net proceeds received from foreign seasonal lines of credit and the non-recurrence of partial repayments made on long-term debt in the prior-year period.

Previous wording

Capital investments in our leaf operations were primarily for routine replacement of machinery and equipment, as well as investments in assets to enhance our sustainability efforts or increase efficiencies, which we believe will add value to our customers. We incurred approximately $4.3 million in capital expenditures for the three months ended June 30, 2025, and are expecting to incur an additional $21.8 million for the remainder of the fiscal year ending March 31, 2026.

Current wording

Capital investments in our leaf operations were primarily for routine replacement of machinery and equipment, as well as investments in assets to enhance our sustainability efforts or increase efficiencies, which we believe will add value to our customers. We incurred approximately $9.7 million in capital expenditures for the six months ended September 30, 2025, and are expecting to incur an additional $16.4 million for the remainder of the fiscal year ending March 31, 2026.